The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as a company's Total Current Assets divides by its Total Current Liabilities. Darden Restaurants's current ratio for the quarter that ended in Feb. 2024 was 0.39.
Darden Restaurants has a current ratio of 0.39. It indicates that the company may have difficulty meeting its current obligations. Low values, however, do not indicate a critical problem. If Darden Restaurants has good long-term prospects, it may be able to borrow against those prospects to meet current obligations.
The historical rank and industry rank for Darden Restaurants's Current Ratio or its related term are showing as below:
DRI'
s Current Ratio Range Over the Past 10 Years
Min: 0.34 Med: 0.57 Max: 1.22
Current: 0.39
During the past 13 years, Darden Restaurants's highest Current Ratio was 1.22. The lowest was 0.34. And the median was 0.57.
DRI's Current Ratio is ranked worse than 87.39% of 349
companies
in the Restaurants industry
Industry Median: 1.02
vs DRI: 0.39
Darden Restaurants Current Ratio Historical Data
The historical data trend for Darden Restaurants's Current Ratio can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
* Premium members only.
Darden Restaurants Annual Data
Trend
May14
May15
May16
May17
May18
May19
May20
May21
May22
May23
Current Ratio
0.61
0.61
1.01
0.64
0.51
Darden Restaurants Quarterly Data
May19
Aug19
Nov19
Feb20
May20
Aug20
Nov20
Feb21
May21
Aug21
Nov21
Feb22
May22
Aug22
Nov22
Feb23
May23
Aug23
Nov23
Feb24
Current Ratio
0.46
0.51
0.40
0.36
0.39
Competitive Comparison
For the Restaurants subindustry, Darden Restaurants's Current Ratio, along with its competitors' market caps and Current Ratio data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Darden Restaurants Current Ratio Distribution
For the Restaurants industry and Consumer Cyclical sector, Darden Restaurants's Current Ratio distribution charts can be found below:
* The bar in red indicates where Darden Restaurants's Current Ratio falls into.
Darden Restaurants Current Ratio Calculation
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets.
Darden Restaurants's Current Ratio for the fiscal year that ended in May. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Darden Restaurants (NYSE:DRI) Current Ratio Explanation
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to turn its product into cash. Companies that have trouble getting paid on their receivables or have long inventory turnover can run into liquidity problems because they are unable to alleviate their obligations. Because business operations differ in each industry, it is always more useful to compare companies within the same industry.
Acceptable current ratios vary from industry to industry and are generally between 1 and 3 for healthy businesses.
The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. While this shows the company is not in good financial health, it does not necessarily mean that it will go bankrupt - as there are many ways to access financing - but it is definitely not a good sign.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Darden Restaurants Current Ratio Related Terms
Thank you for viewing the detailed overview of Darden Restaurants's Current Ratio provided by GuruFocus.com. Please click on the following links to see related term pages.
Darden Restaurants (Darden Restaurants) Business Description
Darden Restaurants is the largest restaurant operator in the U.S. full-service space, with consolidated revenue of $10.5 billion in fiscal 2023 resulting in 3%-4% full-service market share (per NRA data and our calculations). The company maintains a portfolio of 10 restaurant brands: Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Ruth's Chris, Yard House, The Capital Grille, Seasons 52, Eddie V's, Bahama Breeze, and The Capital Burger. Darden generates revenue almost exclusively from company-owned restaurants, though a small network of franchised restaurants and consumer-packaged goods sales through the traditional grocery channel contribute modestly. As of the end of its fiscal 2023, the company operated 1,914 restaurants in the U.S.
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